INSURANCE firms have found a new way to rip off loyal customers - charging them “admin fees” of as much as £50 that new customers avoid, a probe reveals.

The additional fees are ON TOP of the higher premiums that existing customers are typically hit with.

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On average, 40% of people will automatically renew their car and home insurance, without first looking around for a better deal

Big firms such as Budget, Hastings, Saga and Swinton are among those to add fees at renewal, the report by Money Saving Expert found.

The consumer site asked 20 major insurers and brokers if they charged an admin fee simply for renewing your car or home insurance policy.

Nine said they did, with the fees costing up to £50 for those who bought their car insurance from Budget.

These fees are in addition to the premium you pay, which can often be significantly more if you’re renewing, as the best prices are usually for new customers.

Guy Anker, managing editor at MoneySavingExpert.com, said: “Auto-renewal is often a rip-off, and this investigation shows those who do it often face a double whammy, with extra renewal fees making it even worse.

“This once again proves what we’ve long said – you should simply never auto-renew, but look around to find the best overall deal instead.”

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Millions are likely to face these extra admin fees, as industry experts say that a 40 per cent auto-renewal rate was typical for car and home insurance customers across the market.

According to its most recent annual financial accounts, Swinton had a total of 2.2 million policyholders on its books, while Saga and Hastings are understood to also have at least two million customers each. Kwik Fit reportedly has more than a million.

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The admin fees come as a 'double blow' for existing customers, who are already usually hit by higher premiums

A Saga spokesperson said its £20 renewal fee was previously included within the overall price of a policy.

A spokesperson for Hastings said the fee it charges is an “arrangement fee” which is also charged to new customers when they first take out a policy.

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Budget also told us that its “administration fee” of £50 is for new and existing car insurance customers and says the fee is included within the overall price quoted.

None of the nine companies listed in the table above could guarantee that, aside from the renewal fee, existing customers wouldn’t pay more for their premiums than new customers on a like-for-like basis.